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Economist Dan O’Flaherty Studies the Economics of Race in the U.S.

July 08, 2015

Brendan O’Flaherty was a teenager in Newark, N.J. in the 1960s, when the city was engulfed by racially charged political battles and violence. In 1967, racial tensions and allegations of police brutality sparked five days of riots that left 26 dead and hundreds injured, leaving the once-vibrant core of New Jersey’s largest city with enduring scars.

Today, the Columbia professor of economics has a simple explanation for his interest in issues surrounding race. “I’m from Newark,” he says.

O’Flaherty, who has a Ph.D. from Harvard, came to Columbia in 1987 after two years as an aide to Kenneth Gibson, Newark’s first black mayor, and stints teaching at the New Jersey Institute of Technology. He works with colleagues at Columbia and elsewhere to study a wide range of urban issues, including homelessness, crime and most recently, panhandling.

His latest book, The Economics of Race in the United States, explores disparities in education, employment, housing and health care among various racial groups and the impact on their economic well-being. “Everything is connected,” O’Flaherty writes in the book. “You can’t think about jobs, for instance, without thinking about schools. But to think about schools, you have to think about residences … Discrimination or historical disadvantage in one sphere of life inevitably spills over to many other spheres of life.”

With so many different issues involved, public policy solutions are hard to come by, he said in an interview in his International Affairs Building office. But he has a few suggestions: “Early childhood education is a no-brainer. We need a lot of experimentation in how health care is delivered, and in different kinds of insurance. Police have to show they are very serious about investigating all murders, which disproportionately affect African American men, and pay less attention to turnstile jumping.”

For an economist, lack of good data can be an issue. “That we have really poor data about police shootings is an indication that the people who matter in our society haven’t really thought about them that much,” O’Flaherty says. “You can tell what a society cares about by what it counts.”

For his research on homelessness O’Flaherty is working with data from Australia, which he says is much more comprehensive than what’s available in the U.S. The latter relates mostly to people who are already in shelters, not the process by which they become homeless and how it affects the course of their lives. Australia’s data, by contrast, follows people experiencing housing instability over three-year periods, including those at risk for homelessness as well as the already homeless.

Another inner-city issue is panhandling, which presents intriguing questions for an urban economist. Yet there is little research on it, O’Flaherty says. In New York, for instance, panhandlers stake out some of the most valuable real estate in the world without paying for it, but they don’t seem to fight over who gets a particular spot. How is the space allocated? If New Yorkers became more generous with donations, would that attract more panhandlers, who would then take in less money as they divide a bigger pie? If New Yorkers became hostile to panhandlers, would they simply stay in place and be worse off, or would they do something else? Such questions are the focus of O’Flaherty’s current research.

The Economics of Race includes a chapter on immigration because “to talk about race in the United States, you have to talk about immigration,” O’Flaherty says, noting that the 1965 legislation that opened the door to immigrants from Asia, Africa and the Middle East grew out of the fight for civil rights for minorities. “The reason minorities will become the majority in the U.S. is because of immigration,” he says.

O’Flaherty is also studying housing and wealth by ethnic group from 1999-2011—before, during and after the financial crisis. Blacks and whites had ups and downs, he says, but the boom and subsequent bust were bigger for Hispanics as a group. He says it’s too early to draw conclusions because the research is still in progress.

Race will continue to matter in people’s lives, with positive and negative aspects. Attitudes endure for generations, he says, citing a study showing that people living in a part of Germany where there were pogroms in the 1500s and 1600s were more likely to vote for the Nazis in 1932. “I don’t think the world will ever be post-racial,” O’Flaherty says.